Equity's 4-year rally sees more Indians adopting SIP culture
The Covid-induced lockdowns, which spared millions of ordinary officegoers the daily commute and spawned a loyal army of equity investors, appear to have drastically altered the asset-class mix of household savings in India.
Equity is now the visibly dominant category in pooled funds, garnering a three-fifths share of the money mobilised by mutual funds, as stocks became the preferred bet for the ordinary saver seeking to beat a sticky inflation gauge.
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Franklin Templeton data showed the share of equity assets as a percentage of total mutual fund assets climbed to 60% in April, from 39.2% in December 2020. The total AUM of mutual funds surged to ₹57.26 lakh crore in the same period, from ₹31.02 lakh crore.
Fund houses believe one big reason for this move is the strong rally in the past four years, where markets have yet to see a significant correction. From the period December 2020 to April 2024, the benchmark Nifty 50 gained 72%, Nifty Midcap 150 rose 151%, while the Nifty Smallcap 250 rose 178%.
This sharp rise increased investor interest in equity mutual funds.
«Investor composition in the overall pie has changed with individual investors now owning 60% of the industry assets. They are using mutual funds to allocate to equity, which in turn is driving up the share of these assets,» said Swarup Mohanty, vice-chairman and CEO of Mirae Asset Investment Managers.
Financial planners point out that the SIP
